Directors and Officers (D&O) Insurance
Protection of personal assets of company executives in the event of a breach of their duty of care.
Confident decision-making at the highest level
Serving as a corporate officer carries unlimited personal liability for damages caused to the company by a breach of legal obligations. Directors & Officers (D&O) liability insurance protects the private assets of directors, managing directors, and board members from claims brought by the company, shareholders, creditors, or government authorities. It enables management to make strategic decisions without the paralyzing fear of personal financial ruin.
Who can sue a manager and why?
Company and Shareholders
The most common source of claims is the company itself (e.g., after a change in management or ownership structure) or dissatisfied shareholders. They sue managers for poor acquisitions, disadvantageous asset sales, or management errors that led to a decrease in the company's value.
Creditors and Insolvency
In the event of a company's bankruptcy, the insolvency administrator often turns to former management with a claim for damages if they failed to file for insolvency in time or diverted assets. D&O insurance is a key defense tool for managers in these crisis scenarios.
State Authorities and Employees
Claims can also be raised by authorities (for errors in taxes, health and safety, environmental compliance) or employees (for discrimination, wrongful termination – so-called EPL practices, which can be included in the insurance).
Examples of real-world events that this insurance addresses
Unfavorable Investment
The board approved the acquisition of a competitor, which turned out to be a loss-making venture. New owners are suing former managers for millions in damages.
Grant Error
The executive signed a grant application with an error, which forced the company to return the grant along with a penalty. The company is seeking damages from the executive.
Insolvency Proceedings
The bankruptcy trustee sued the director for failing to file for insolvency in time, thereby harming creditors. The insurance company covers the manager's defense.
Employee Discrimination
A former employee is suing the director for bullying and discriminatory dismissal. The insurance policy covers legal dispute costs and potential compensation.
How Eurovalley can help you
Are you a good manager?
A good manager is also paid to anticipate worst-case scenarios and prepare for them during times when things are going well, everything is running smoothly, and there isn't a cloud in the sky. Because it's not a matter of if something will go wrong, but when.
Let's talk about D&O insurance
Serving as a corporate officer carries unlimited personal liability for damages caused to the company by a breach of legal obligations. Directors & Officers (D&O) liability insurance protects the private assets of directors, managing directors, and board members from claims brought by the company, shareholders, creditors, or government authorities. It enables management to make strategic decisions without the paralyzing fear of personal financial ruin.
